Separating Hype From Reality: Why There Is No Retail Apocalypse

Rochester high street

Rochester high street

Shutterstock


Bear with me, I need to get something off my chest:

THERE IS NO RETAIL APOCALYPSE.

Ah, that feels better. Now, in the week when yet more headlines are hysterically screaming the polar opposite, this might appear an overly-optimistic claim. But it's true. And to find the answer we need to dig a little deeper than merely scratching the surface.

Retail apocalypse, death of the high street - I'm sure you are as fed up as I am with hearing and reading about them as if the entire retail industry is about to fold and slide inexorably beneath the waves.

Or if it isn't the doom-mongers, it's the buzzword bonanza which seems to have taken on a life of its own and sparked an entire industry. Omnichannel, experiential, frictionless, and my personal favorite: phygital. Holy mother of.....where did THAT come from?

It can really get quite depressing, which is why, every now and then, a small dose of reality is needed. In other words, separating the hype from the reality and in the process uncovering what is really going on in retail.

The Biggest Disruptor

I know what you're thinking, Amazon, right? Well, I'm here to tell you that you are the biggest disruptor. And by that I mean all of us. We, as consumers, are the biggest disruptor.

The pace of retail innovation is rapidly falling behind consumer expectations

Andrew Busby

Just stop and think about your own shopping habits compared to just ten years ago. My guess is that they have changed, in some cases, quite profoundly. And not only that, but our expectations have changed beyond all recognition.

Where once we might have accepted mediocre as just part of the shopping experience, now we simply reject it out of hand.

This rapid shift has left many retailers blindsided and is just one of the reasons for the evolution of the high street.

The High Street Is Evolving

Which brings me nicely on to one of the most hotly debated topics in retail: the death of the high street.

This is, of course, nonsense. Granted, if you walk down most high streets or through shopping malls, you will see shuttered units, but this was always the case. It is simply part of a constant refresh and is no cause for alarm.

The danger is that while the high street does require support (see below) it does not need knee-jerk reaction. There is plenty of great retail out there however, there is also a proportion of very average retail. Darwin is at work.

Remain Relevant

Relevance trumps discounting every time. Never was it so important and critical to be relevant. But in order to do so is not the work of a moment.

There's a reason why retailers such as JD Sports, B&M, Deichmann, Primark, to name a few, are so successful. They know what their customers want and they deliver it to them time and time again.

They are clear on what their brand stands for and they have a laser focus on maintaining it.

Tax Matters

We all need to pay our taxes. The same applies to businesses. It's just that the current taxation system (including that for all retail businesses) was conceived in 1988. To put that in perspective, six years before Amazon was born.

In 1988 none of us were shopping on the internet, this arrived seven years later with Amazon and eBay. No, back then, to shop for something we had to physically visit a store.

Problem is that today, that same system for taxing businesses through business rates remains unchanged. Which means that a huge Amazon warehouse in the middle of nowhere is taxed on exactly the same basis as a shop on London's Oxford Street. Are you listening Westminster? Thought not.

Even My Fingernails Feel Angry

Because I despair when I hear retailers blaming everything other than their own poor performance for declining sales. You know what I'm referring to. The weather. Rising costs. Brexit (granted, that one could be valid). Declining consumer confidence.

But these factors are affecting all retailers so how come some are struggling whilst others thrive?

Legacy Retail

Sad to say, many fall into this category. They are the ones who, for decades were cloning the high street in the days when growth and success were measured by the number of new store openings.

And guess what? Those self same retailers have now woken up and realised that they've got too much space. And what's more, it's not only costing them an arm and a leg but they're locked into leases for, in some cases, decades.

The legacy of the past is now truly coming home to roost and many are finding themselves caught in a perfect storm.

So there you have it, my personal view of just some of the factors influencing the transformation of retail. You may agree or disagree and in some cases you may wonder if I've been smoking something strange.

Either way, please post your comments, if nothing else it's always good to debate what is, after all, the greatest sector of all.

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Bear with me, I need to get something off my chest:

THERE IS NO RETAIL APOCALYPSE.

Ah, that feels better. Now, in the week when yet more headlines are hysterically screaming the polar opposite, this might appear an overly-optimistic claim. But it's true. And to find the answer we need to dig a little deeper than merely scratching the surface.

Retail apocalypse, death of the high street - I'm sure you are as fed up as I am with hearing and reading about them as if the entire retail industry is about to fold and slide inexorably beneath the waves.

Or if it isn't the doom-mongers, it's the buzzword bonanza which seems to have taken on a life of its own and sparked an entire industry. Omnichannel, experiential, frictionless, and my personal favorite: phygital. Holy mother of.....where did THAT come from?

It can really get quite depressing, which is why, every now and then, a small dose of reality is needed. In other words, separating the hype from the reality and in the process uncovering what is really going on in retail.

The Biggest Disruptor

I know what you're thinking, Amazon, right? Well, I'm here to tell you that you are the biggest disruptor. And by that I mean all of us. We, as consumers, are the biggest disruptor.

The pace of retail innovation is rapidly falling behind consumer expectations

Andrew Busby

Just stop and think about your own shopping habits compared to just ten years ago. My guess is that they have changed, in some cases, quite profoundly. And not only that, but our expectations have changed beyond all recognition.

Where once we might have accepted mediocre as just part of the shopping experience, now we simply reject it out of hand.

This rapid shift has left many retailers blindsided and is just one of the reasons for the evolution of the high street.

The High Street Is Evolving

Which brings me nicely on to one of the most hotly debated topics in retail: the death of the high street.

This is, of course, nonsense. Granted, if you walk down most high streets or through shopping malls, you will see shuttered units, but this was always the case. It is simply part of a constant refresh and is no cause for alarm.

The danger is that while the high street does require support (see below) it does not need knee-jerk reaction. There is plenty of great retail out there however, there is also a proportion of very average retail. Darwin is at work.

Remain Relevant

Relevance trumps discounting every time. Never was it so important and critical to be relevant. But in order to do so is not the work of a moment.

There's a reason why retailers such as JD Sports, B&M, Deichmann, Primark, to name a few, are so successful. They know what their customers want and they deliver it to them time and time again.

They are clear on what their brand stands for and they have a laser focus on maintaining it.

Tax Matters

We all need to pay our taxes. The same applies to businesses. It's just that the current taxation system (including that for all retail businesses) was conceived in 1988. To put that in perspective, six years before Amazon was born.

In 1988 none of us were shopping on the internet, this arrived seven years later with Amazon and eBay. No, back then, to shop for something we had to physically visit a store.

Problem is that today, that same system for taxing businesses through business rates remains unchanged. Which means that a huge Amazon warehouse in the middle of nowhere is taxed on exactly the same basis as a shop on London's Oxford Street. Are you listening Westminster? Thought not.

Even My Fingernails Feel Angry

Because I despair when I hear retailers blaming everything other than their own poor performance for declining sales. You know what I'm referring to. The weather. Rising costs. Brexit (granted, that one could be valid). Declining consumer confidence.

But these factors are affecting all retailers so how come some are struggling whilst others thrive?

Legacy Retail

Sad to say, many fall into this category. They are the ones who, for decades were cloning the high street in the days when growth and success were measured by the number of new store openings.

And guess what? Those self same retailers have now woken up and realised that they've got too much space. And what's more, it's not only costing them an arm and a leg but they're locked into leases for, in some cases, decades.

The legacy of the past is now truly coming home to roost and many are finding themselves caught in a perfect storm.

So there you have it, my personal view of just some of the factors influencing the transformation of retail. You may agree or disagree and in some cases you may wonder if I've been smoking something strange.

Either way, please post your comments, if nothing else it's always good to debate what is, after all, the greatest sector of all.

Follow me on Twitter. Check out my website.

I am a retail analyst, writer, and keynote speaker on retail challenges and trends with a focus on consumer behavior, customer experience, and technology disruption. Pr

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